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Securities Law Commons

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2003

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Articles 1 - 30 of 75

Full-Text Articles in Securities Law

Counselor, Gatekeeper, Shareholder, Thief: Why Attorneys Who Invest In Their Clients In A Post-Enron World Are "Selling Out," Not "Buying In,", A. Christine Hurt Dec 2003

Counselor, Gatekeeper, Shareholder, Thief: Why Attorneys Who Invest In Their Clients In A Post-Enron World Are "Selling Out," Not "Buying In,", A. Christine Hurt

Faculty Scholarship

No abstract provided.


Regulating Irrational Exuberance And Anxiety In Securities Markets , Peter H. Huang Dec 2003

Regulating Irrational Exuberance And Anxiety In Securities Markets , Peter H. Huang

Faculty Scholarship at Penn Law

This paper analyzes the regulatory implications of irrational exuberance and anxiety in securities markets. U.S. federal securities laws mandate the disclosure of certain information, but regulate only the cognitive form and content of that information. An important and unstudied question is how to regulate securities markets where some investors respond not only cognitively to the form and content of information, but also emotionally to the form and content of information. This paper investigates that question when some investors feel exuberance or anxiety that is unjustified by cognitive processing of the available information. This paper develops the implications for mandatory ...


Law, Share Price Accuracy, And Economic Performance: The New Evidence, Merritt B. Fox, Randall Morck, Bernard Yeung, Artyom Durnev Dec 2003

Law, Share Price Accuracy, And Economic Performance: The New Evidence, Merritt B. Fox, Randall Morck, Bernard Yeung, Artyom Durnev

Michigan Law Review

Mandatory disclosure has been at the core of U.S. securities regulation since its adoption in the early 1930s. For many decades, this fixture of our financial system was accepted with little examination. Over the last twenty years, however, mandatory disclosure has been subject to intensifying intellectual crosscurrents. Some commentators hold out the U.S. system as the standard for the world. They argue that adoption by other countries of a U.S.-styled system, with its greater corporate transparency, would enhance their economic performance. Other commentators, in contrast, insist that the U.S. mandatory disclosure regime represents a mistake ...


Reforming Securities Class Actions From The Bench: Judging Fiduciaries And Fiduciary Judging, Lisa L. Casey Nov 2003

Reforming Securities Class Actions From The Bench: Judging Fiduciaries And Fiduciary Judging, Lisa L. Casey

BYU Law Review

No abstract provided.


Unfit To Serve: Permanently Barring People From Serving As Officers And Directors Of Publicly Traded Companies After The Sarbanes-Oxley Act, Philip F.S. Berg Nov 2003

Unfit To Serve: Permanently Barring People From Serving As Officers And Directors Of Publicly Traded Companies After The Sarbanes-Oxley Act, Philip F.S. Berg

Vanderbilt Law Review

On June 4, 2003, lifestyle guru Martha Stewart was indicted on multiple criminal and civil charges by the Securities and Exchange Commission (SEC or Commission). The charges, including obstruction of justice and civil insider trading, stemmed from Stewart's sale of ImClone stock shortly before the Food and Drug Administration rejected a drug produced by ImClone and sent the company's stock price tumbling. Although Stewart could face a number of serious penalties under her criminal indictment, the primary remedy sought by the SEC for her civil insider trading charges is rather uncommon-a bar from serving as a director of ...


Understanding Price-Based Antidilution Protection: Five Principles To Apply When Negotiating A Down-Round Financing, Robert P. Bartlett Nov 2003

Understanding Price-Based Antidilution Protection: Five Principles To Apply When Negotiating A Down-Round Financing, Robert P. Bartlett

Scholarly Works

As most venture capital investors are aware, the economic downturn of the past two years—and the concomitant decrease in private company valuations—has created an opportunity for significant returns on new venture investments seldom seen since the early 1990s. Yet while the investment opportunities of the current economic environment may have attractive financial valuations, they frequently come with the added cost of significant transactional complexity. In particular, the issuance of securities by a private company at a price that is below the price previously paid by the company's investors (typically referred to as a “down-round” financing) may trigger ...


The Use Of Public Interest Enforcement Orders By Securities Regulators In Canada, Mary G. Condon Oct 2003

The Use Of Public Interest Enforcement Orders By Securities Regulators In Canada, Mary G. Condon

Commissioned Reports, Studies and Public Policy Documents

The purpose of this study is to examine the use of discretionary enforcement powers by securities regulators in Canada, in order to assess the implications of multiple regulators for the enforcement of securities law.


The Thin Line Between Love And Hate: Why Affinity-Based Securities And Investment Fraud Constitutes A Hate Crime, Lisa M. Fairfax Oct 2003

The Thin Line Between Love And Hate: Why Affinity-Based Securities And Investment Fraud Constitutes A Hate Crime, Lisa M. Fairfax

Faculty Scholarship

This article explores the parallels between the prototypical hate crime and affinity fraud—securities and investment fraud that targets identifiable religious, racial and ethnic groups—and asserts that those parallels justify treating affinity fraud as a hate crime.


Enron, Watergate And The Regulation Of The Legal Profession, Arnold Rochvarg Oct 2003

Enron, Watergate And The Regulation Of The Legal Profession, Arnold Rochvarg

All Faculty Scholarship

The most famous scandal of the twentieth century was the Watergate scandal, which most notably led to the resignation of Richard Nixon as President of the United States. The significance of Watergate, however, extends further than the resignation of Nixon. Because Watergate involved so many lawyers, it had a great impact on the regulation of the legal profession. Although the twenty-first century has just started, the strongest contender for this century's most famous scandal is the Enron scandal. Although the Enron scandal is identified mostly with misconduct by accountants and corporate officials, it too involved lawyers and has impacted ...


Beyond The Busihess Judgment Rule: Protecting Bidder Firm Shareholders From Value-Reducing Acquisitions, Ryan Houseal Oct 2003

Beyond The Busihess Judgment Rule: Protecting Bidder Firm Shareholders From Value-Reducing Acquisitions, Ryan Houseal

University of Michigan Journal of Law Reform

During the takeover transactions of the 1980s, bidder firms paid target firm shareholders average premiums of approximately 50% for their shares. Did the sizable premiums paid to target firm shareholders during the 1980s reflect post-takeover improvement in the target's performance? Or were the premiums a result of the mismanagement of the bidder firms' assets?

The answer will help determine whether additional legal mechanisms should be established to protect bidder firm shareholders from the threat of management's consummation of value reducing acquisitions. Accordingly, this Note examines various studies which attempt to identify the source of the premiums paid to ...


The Petrochina Syndrome: Regulating Capital Markets In The Anti-Globalization Era, Stephen F. Diamond Oct 2003

The Petrochina Syndrome: Regulating Capital Markets In The Anti-Globalization Era, Stephen F. Diamond

Cornell Law Faculty Publications

No abstract provided.


The Petrochina Syndrome: Regulating Capital Markets In The Anti-Globalization Era, Stephen F. Diamond Sep 2003

The Petrochina Syndrome: Regulating Capital Markets In The Anti-Globalization Era, Stephen F. Diamond

Cornell Law Faculty Working Papers

This article argues that the process of globalization has generated a legitimation deficit that can be the source of wasteful, even destructive, social and political conflict. I stylize this outcome as "the PetroChina Syndrome," after a leading example of the kind of activity generated in response to globalization, the PetroChina Campaign, where a coalition of labor, human rights, environmental, anti-slavery and religious groups worked together to oppose the initial public offering of a major Chinese oil company led by Goldman Sachs. The article begins with a discussion of this important but largely unexplored dimension of the anti-globalization era triggered by ...


Shutting The Barn Door Before The Horse Is Stolen: How And Why State Public Utility Commissions Should Regulate Transactions Between A Public Utility And Its Affiliates, Judy Sheldrew Sep 2003

Shutting The Barn Door Before The Horse Is Stolen: How And Why State Public Utility Commissions Should Regulate Transactions Between A Public Utility And Its Affiliates, Judy Sheldrew

Nevada Law Journal

No abstract provided.


The Mechanisms Of Market Inefficiency: An Introduction To The New Finance, Lynn A. Stout Jul 2003

The Mechanisms Of Market Inefficiency: An Introduction To The New Finance, Lynn A. Stout

Cornell Law Faculty Publications

During the 1970s and early 1980s, the Efficient Capital Market Hypothesis (ECMH) became one of the most widely-accepted and influential ideas in finance economics. More recently, however, the idea of market efficiency has fallen into disrepute as a result of market events and growing empirical evidence of inefficiencies. This essay argues that the weaknesses of the efficient market theory are, and were, apparent from a careful inspection of its initial premises, including the presumptions of homogeneous investor expectations, effective arbitrage, and investor rationality. By the same token, a wide range of market phenomena inconsistent with the ECHM can be explained ...


Preliminary Imprimaturs: Prevailing Party Status Based On Preliminary Injunctions, Bart Forsyth Jun 2003

Preliminary Imprimaturs: Prevailing Party Status Based On Preliminary Injunctions, Bart Forsyth

Washington and Lee Law Review

No abstract provided.


Shareholder Oppression & Dividend Policy In The.Close Corporation, Douglas K. Moll Jun 2003

Shareholder Oppression & Dividend Policy In The.Close Corporation, Douglas K. Moll

Washington and Lee Law Review

No abstract provided.


Recent Intensification Of Investor Protection In The Korean Securities Market: The Mandatory And Fair Disclosure Systems, Kwang-Rok Kim May 2003

Recent Intensification Of Investor Protection In The Korean Securities Market: The Mandatory And Fair Disclosure Systems, Kwang-Rok Kim

Washington International Law Journal

This Article analyzes the Korean fair disclosure system and the Korean mandatory disclosure system under the Korean Securities and Exchange Act ("KSEA"). After the turbulence in the financial markets resulting from the economic crises of late 1997, the South Korean government realized that the Korean economy had failed to keep pace with the world economy. The Korean economy underwent many changes after being offered financial relief from the International Monetary Fund. As part of these changes, the government adopted a series of structural reform measures to improve the standard of corporate governance and enhance corporate management. The KSEA now provides ...


Private Enforcement Of Securities Fraud Law In China: A Critique Of The Supreme People's Court 2003 Provisions Concerning Private Securities Litigation, Guiping Lu May 2003

Private Enforcement Of Securities Fraud Law In China: A Critique Of The Supreme People's Court 2003 Provisions Concerning Private Securities Litigation, Guiping Lu

Washington International Law Journal

On January 9, 2003, China's Supreme People's Court issued a new ruling with detailed provisions governing private securities litigation involving disclosure of false or misleading information. The new ruling is expected to play an important role in regulating and developing China's securities markets by providing a necessary judicial safeguard against infringement upon investors' interests. The new ruling, however, is unlikely to achieve its expected effect due to various procedural and substantive hurdles to investor access to judicial recourse. The built-in procedural hurdles either make it very difficult for securities investors to bring private actions, or, in some ...


Standing Up To Wall Street (And Congress), Richard W. Painter May 2003

Standing Up To Wall Street (And Congress), Richard W. Painter

Michigan Law Review

In 1992, Arthur Levitt co-chaired a fundraising dinner for William Clinton. The dinner raised $750,000 (p. 7). Clinton was elected President, and Levitt got the job he wanted: Chairman of the Securities and Exchange Commission. Levitt, a former Chairman of the American Stock Exchange and a connected Democrat, was well qualified for the job. His, however, became a pyrrhic victory when accountants, issuers, broker-dealers, and other special interests used their own political connections to frustrate just about everything he sought to do. Levitt tells the story of his struggle against these well-funded interests in Take on the Street. One ...


Sarbanes-Oxley And The Role Of Lawyers In Public Companies, Lawrence A. Cunningham Apr 2003

Sarbanes-Oxley And The Role Of Lawyers In Public Companies, Lawrence A. Cunningham

Boston College Law School Lectures and Presentations

No abstract provided.


Securities Fraud As Corporate Governance: Reflections Upon Federalism, Robert B. Thompson, Hillary A. Sale Apr 2003

Securities Fraud As Corporate Governance: Reflections Upon Federalism, Robert B. Thompson, Hillary A. Sale

Vanderbilt Law Review

State law gives corporate managers extremely broad power to direct increasingly large pools of collective business assets. Not surprisingly, economic incentives, norms, markets, and law all work to constrain the breadth of the power and the potential for abuse of what is other people's money.' State corporate law has occupied the center stage in the legal portion of this landscape, with federal securities law playing a supporting role-at least in the academic presentation of the debate. The New Deal's securities legislation eschewed a general federal corporations statute in favor of a more focused federal role emphasizing disclosure and ...


Manual De Derecho Procesal Civil, Edward Ivan Cueva Feb 2003

Manual De Derecho Procesal Civil, Edward Ivan Cueva

Edward Ivan Cueva

No abstract provided.


Responsabilidad Civil Ante Las Pérdidas Por Gestión En Los Fondos Comunes De Inversión, Martin Paolantonio Jan 2003

Responsabilidad Civil Ante Las Pérdidas Por Gestión En Los Fondos Comunes De Inversión, Martin Paolantonio

Martin Paolantonio

Nota crítica al primer fallo que resolvió asignar responsabilidad a los órganos del fondo común de inversión ante resultados negativos de la gestión


Flaw In The Sarbanes-Oxley Reform: Can Diversity In The Boardroom Quell Corporate Corruption?, Steven A. Ramirez Jan 2003

Flaw In The Sarbanes-Oxley Reform: Can Diversity In The Boardroom Quell Corporate Corruption?, Steven A. Ramirez

Faculty Publications & Other Works

No abstract provided.


Economic Suicide: The Collision Of Ethics And Risk In Securities Laws, Barbara Black, Jill Gross Jan 2003

Economic Suicide: The Collision Of Ethics And Risk In Securities Laws, Barbara Black, Jill Gross

Faculty Articles and Other Publications

The first part of this article looks at whether there are any legal principles derived from regulation or the case law to support an "economic suicide" claim. The second part of the article reviews arbitrators' awards to determine whether arbitrators do, in fact, decide favorably on economic suicide claims. The article also looks at some arbitrators' awards that appear to recognize an economic suicide claim to identify any factors that may lead arbitrators to award damages to the claimant. Finally, in the third part, we address whether policy considerations support an extension of recognized brokers' duties to include a duty ...


The Irony Of Securities Arbitration Today: Why Do Brokerage Firms Need Judicial Protection?, Barbara Black Jan 2003

The Irony Of Securities Arbitration Today: Why Do Brokerage Firms Need Judicial Protection?, Barbara Black

Faculty Articles and Other Publications

In 1987 the securities industry achieved a major victory. Until then, because of the Supreme Court's 1953 holding in Wilko v. Swan that agreements to arbitrate federal securities claims contained in customer agreements were unenforceable, customers could sue brokerage firms and their salespersons in court, frequently before juries amenable to sizable verdicts, including punitive damages.

Illustrating a classic example of “be careful what you wish for,” brokerage firms no longer find arbitration entirely to their liking. Increasingly they turn to the courts to resist arbitration, to interfere with ongoing arbitration, or to undo the results of arbitration.

Unfortunately, both ...


Investor Skepticism V. Investor Confidence: Why The New Research Analyst Reforms Will Harm Investors, John L. Orcutt Jan 2003

Investor Skepticism V. Investor Confidence: Why The New Research Analyst Reforms Will Harm Investors, John L. Orcutt

Law Faculty Scholarship

Part I of this Article provides an overview of research analysts and their basic functions, including a discussion of sell-side analysts' role in the market's recent boom and bust. Part II examines the conflicts of interest that have plagued sell-side research, and Part III reviews the Regulatory Actions that are meant to address these conflicts. In Part IV, the author will make the case for encouraging, rather than lessening, investor skepticism in sell-side research and will explain why the Regulatory Actions are not likely to improve the performance of sell-side analysts. Finally, Part V will offer a simpler proposal ...


Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard Jan 2003

Should Congress Repeal Securities Class Action Reform?, Adam C. Pritchard

Other Publications

The Private Securities Litigation Reform Act of 1995 was designed to curtail class action lawsuits by the plaintiffs’ bar. In particular, the high-technology industry, accountants, and investment bankers thought that they had been unjustly victimized by class action lawsuits based on little more than declines in a company’s stock price. Prior to 1995, the plaintiffs’ bar had free rein to use the discovery process to troll for evidence to support its claims. Moreover, the high costs of litigation were a powerful weapon with which to coerce companies to settle claims. The plaintiffs’ bar and its allies in Congress have ...


Trust, Guilt, And Securities Regulation, Peter H. Huang Jan 2003

Trust, Guilt, And Securities Regulation, Peter H. Huang

Articles

This Article analyzes the importance of trust in securities investing and how guilt about breaching such trust has implications for securities regulation. Both U.S. federal securities laws and the regulations of the National Association of Securities Dealers impose high standards of professional conduct upon securities professionals. But exactly what are and should be the legal responsibilities of securities professionals remain the subject of much debate. In particular, courts disagree over when broker-dealers are fiduciaries of their clients. A legal consequence of a fiduciary relationship is a duty of fair dealing. This Article is the first to analyze the emotional ...


Reforming Securities Class Actions From The Bench: Judging Fiduciaries And Fiduciary Judging, Lisa L. Casey Jan 2003

Reforming Securities Class Actions From The Bench: Judging Fiduciaries And Fiduciary Judging, Lisa L. Casey

Journal Articles

The attorneys' fees awarded to plaintiffs’ counsel in securities fraud class actions have generated controversy for years. Critics have claimed that enormous fee awards come at the expense of defrauded investors and simply spur extortionate lawsuits against issuers and other potential deep pocket defendants. Commentators also have raised concerns that plaintiffs' class action lawyers manipulated class representatives, persons who had little incentive to monitor class counsel’s activities.

To address these concerns, Congress enacted the Private Securities Litigation Reform Act ("PSLRA"). Among other things, the statute sought to protect absent class members by giving control of the litigation to lead ...